Used By System?

I have an 80 GB drive (NTFS) that reads 74 GB's used but the files read as
60 GB's in size. I attempted to do a defrag when the drive was at 75% full
but it stated that only 1% was available for defragmentation and the other
14% was used for the system. Why is it locking such a large portion of my
drive? How do I free up this space for my own use?